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Flag trading the trend

  • #3,941
  • Apr 26, 2011 4:21am Apr 26, 2011 4:21am
Greetings traders,

I am a long time FF passive member - just never felt like posting charts.
Divergence, this thread is trully exceptional. It gives the minimum necessary tools to become a successful trader.

Even though I didn't get to trade this one I'd like to attach a chart that shows a nice entry for a quick 17 pips according to rules. There was a swing taken out and a nice pullback. The retracement was of a short one but resulted in positive pips. ... and it's a London time.

I hope you have a great day.

God Bless Divergence and all you guys who contribute to this thread.

P.S. The following chart apart from standard indicators do show the EMA55 as it is a nice addition and sometimes lets you quickly know if price is not to far away from the EMA.

P.S. If there is a further request I can post a zoom in chart.
Attached Image (click to enlarge)
Click to Enlarge Name: EU 5min.gif Size: 47 KB
  • #3,942
  • Apr 26, 2011 4:44am Apr 26, 2011 4:44am
Might get a 123 for short in a while. Med cable news out shortly though.
Attached Image (click to enlarge)
Click to Enlarge Name: DIVER 7.jpg Size: 126 KB
  • #3,943
  • Apr 26, 2011 4:49am Apr 26, 2011 4:49am
I think I might made a little mistake in establishing TP in a previous post.

Here are some more charts. What do you guys think?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EU2 5min.gif Size: 44 KB
Click to Enlarge Name: EU3 5min.gif Size: 40 KB
  • #3,944
  • Apr 26, 2011 6:14am Apr 26, 2011 6:14am
Would you please point out to me - how do we count the wave pattern in the example given below. Is this a right way as on chart?

We see that the last swing was already taken out - so ... could we identify this recent movement as a 5 wave pattern, or we would rather start counting waves until the recent swing is taken and a new potential uptrend is established?

The example given below may be a tricky one. Although it looks like it may take it, (it actually took fo 9 pips) but this could be an overtrade and also the begining of 123 forming...

No bearish div visible so far. Sorry guys for my ability to do high frequency trading... It's a thing I need to change... rather quickly!
Attached Image (click to enlarge)
Click to Enlarge Name: EU4 5min.gif Size: 48 KB
  • #3,945
  • Apr 26, 2011 7:00am Apr 26, 2011 7:00am
Quoting tas0s
Hey, can anybody let me know their opinions on these 2 trades I just took a few minutes ago?

http://img96.imageshack.us/img96/4653/eurjpy1.th.png

http://img851.imageshack.us/img851/1430/gbpusd1.th.png

I'm still not sure if I'm trading this method correctly, but trading with these currents rules, I'm still getting some pips. (somehow)

GBPUSD +20.4
EURJPY +26.3
I am not going to analyze these completely because I am not studying those charts right now.

Bottom line, looks like they would have been valid flag setups from a quick glance but you did not follow the rules for the setup bar and entry price. At least according to your lines that you have drawn. Entry is 1 pip above the setup bar. If you are unsure of the setup bar parameters read the PDF on this thread, read the other posts etc.

If you did use the proper setup, you drew the lines on your chart wrong and therefore can be confusing to others when they read your post.
  • #3,946
  • Edited 7:34am Apr 26, 2011 7:23am | Edited 7:34am
Quoting ral1n
would you please point out to me - how do we count the wave pattern in the example given below. Is this a right way as on chart?

We see that the last swing was already taken out - so ... Could we identify this recent movement as a 5 wave pattern, or we would rather start counting waves until the recent swing is taken and a new potential uptrend is established?

The example given below may be a tricky one. Although it looks like it may take it, (it actually took fo 9 pips) but this could be an overtrade and also the begining of 123 forming...

No...
if you look at my chart a few posts back (#3943) you'll see the 5 wave pattern with divergence for a possible trade if confirmed with a 123.
The chart drifted down after the 5 wave pattern so that made it a no-go;
you want to see a nice 123 a little higher and not so many bars in between the top of the 5 wave and the setup.

Some tips:
Wave 1 shouldn't be longer than wave 3. Wave 4 can look horizontal.

Gray.
Technically, we're looking for longs atm and diver is on the eurousd with a mini 123 entered
  • #3,947
  • Apr 26, 2011 7:44am Apr 26, 2011 7:44am
Long off support with prior diver and 123
Attached Image (click to enlarge)
Click to Enlarge Name: diver 8.jpg Size: 115 KB
  • #3,948
  • Apr 26, 2011 7:45am Apr 26, 2011 7:45am
Quoting gtrade
if you look at my chart a few posts back (#3943) you'll see the 5 wave pattern with divergence for a possible trade if confirmed with a 123.
The chart drifted down after the 5 wave pattern so that made it a no-go;
you want to see a nice 123 a little higher and not so many bars in between the top of the 5 wave and the setup.

Some tips:
Wave 1 shouldn't be longer than wave 3. Wave 4 can look horizontal.

Gray.
Technically, we're looking for longs atm and diver is on the eurousd with a mini 123 entered
Correct, thx a bunch!

I'm on my way of doing price action only as the indicators era in my trading has passed away... thus I need a lot of screen time concentrating and focusing on wave patterns and 123's as I've noticed not so long ago, they're the most powerful tools ever!
  • #3,949
  • Apr 26, 2011 7:46am Apr 26, 2011 7:46am
Quoting gtrade
Long off support with prior diver and 123
Taken and complete.
  • #3,950
  • Apr 26, 2011 7:48am Apr 26, 2011 7:48am
Quoting rcwso
taken and complete.

well done if u spotted that one!

Gray.
  • #3,951
  • Apr 26, 2011 7:58am Apr 26, 2011 7:58am
Quoting Ral1n
Would you please point out to me - how do we count the wave pattern in the example given below. Is this a right way as on chart?

We see that the last swing was already taken out - so ... could we identify this recent movement as a 5 wave pattern, or we would rather start...
Hi,

When it comes to elliot waves I would count something like this (see chart).
I would start to count from the very beginning of up move, there is no reason to exclude beginning of the move. Waves which you have described would be part of bigger wave 3. Market is fractal- waves within waves within waves

When it comes to entry, I wouldn't take it because volume was really sloppy during that time (big boys eating their lunch). The best time to trade is in my opinion beginning of London open , US open (LONDON -US overlap). Volatility is your friend. When volume- volatility is low, there is a lot more noise in the market and therefore traps.
Moreover larger corrective move should have form of ABC for me. the place, which you have described was end of A wave.

As it turned out, it was good to wait for US open, nice divergence formed in the direction of trend.

I hope it helps,
Cheers,
Chris
Attached Image (click to enlarge)
Click to Enlarge Name: 26.04.2011r m5.gif Size: 23 KB
Trade what you see, not what you expect. BE LIKE WATER MY FRIEND.
  • #3,952
  • Edited 9:13am Apr 26, 2011 8:59am | Edited 9:13am
Thx a lot Krzyś.

Indeed, it makes a big sense.

Backing to the Long - didn't spot it at first glance, cause I drew the flag right after the price has drifted nearly 40 pips... (the dotted line). Neither there was a quick 123 nor divergence... until an hour - hour and half later.

Patience is a virtue! :-)

Cheers.
Attached Image (click to enlarge)
Click to Enlarge Name: EU5 5min.gif Size: 49 KB
  • #3,953
  • Apr 26, 2011 10:23am Apr 26, 2011 10:23am
Sorry if this has been covered but did Divergence ever mention who his broker was?
  • #3,954
  • Apr 26, 2011 1:14pm Apr 26, 2011 1:14pm
Well my first day trading wasn't bad at all. I missed an opportunity in Asia, but picked up a win in the London session. Then missed another flag opportunity on the GU during US. I later took another short in the EU which I exited early for another small win as I realized once I was in that I had sold directly into support. This was a good move as the price shortly after rallied.

After sitting in the chat room and watching some of the experienced guys (Olarion :-D) playing the ranges using divergence and make a killing I decided to give a GU setup a go. Bailed early due to price stalling on a previous level of support only to see it fly into the money a few candles later.

All in all a good day with 1 Win and another tiny win and a BE.

What I took from today was how effective watching price around the S/R levels can be and watching for divergence can really enhance your performance.

Day 1 = Good day :-) Missed some trades which was a little annoying but then made some good pips as well. So I guess if I was trading with a larger size this could have been a 1-3% day depending on my risk.
  • #3,955
  • Apr 26, 2011 2:26pm Apr 26, 2011 2:26pm
Is this a valid 123? I would say no it isn't because point 2 is too high. Do I see it right/wrong? Any thoughts?
Attached Image (click to enlarge)
Click to Enlarge Name: 123.jpg Size: 104 KB
  • #3,956
  • Apr 26, 2011 3:06pm Apr 26, 2011 3:06pm
Pls still couldn't connect to chat room. got the error message: 'Couldn't look up your hostname'. Besides do i need to know the 'host server' name to connect please?

Quoting PureSymmetry
Hey Fosters,
do you see how price was in a range, then broke up strongly with those large bull candles?

That indicates to me that price is looking to move up. The trend hasnt changed yet but i would be cautious about taking a short here unless i see a 123 and/or divergence. In the case of this short, you didnt have either divergence or a 123.

Hope this helps!

the chatroom is:
http://chat.efnet.org:9090/

the room name is: #Flagtrading.

see you there!

~Pure
  • #3,957
  • Apr 26, 2011 3:32pm Apr 26, 2011 3:32pm
Quoting marian
Is this a valid 123? I would say no it isn't because point 2 is too high. Do I see it right/wrong? Any thoughts?
Hey Marian,

you are right, this is no valid 123. Point 2 has to take out the point 1 candle by at least 1 pip.
So your point 2 candle is more like an "inside bar".

Cheers,
Olarion
  • #3,958
  • Apr 26, 2011 9:52pm Apr 26, 2011 9:52pm
Quoting Olarion1975
Hey Marian,

you are right, this is no valid 123. Point 2 has to take out the point 1 candle by at least 1 pip.
So your point 2 candle is more like an "inside bar".

Cheers,
Olarion
Where is the rule that point 2 has to take out point 1 by 1 pip? Just wondering. I have not read that anywhere. Am I missing something with a 123?

Thanks.
  • #3,959
  • Apr 26, 2011 11:38pm Apr 26, 2011 11:38pm
Quoting Rcwso
Where is the rule that point 2 has to take out point 1 by 1 pip? Just wondering. I have not read that anywhere. Am I missing something with a 123?

Thanks.
+++++++++++++++
In the last video, or perhaps the one just prior to that, I had asked Div about a very similar call on a 123. The response was something to the effect of no valid 123 (according to Div's trading rules), therefore I'd call this not valid.
Think about it. 123 suggests that there are 3 separate, and distinct, points on the chart. I agree with O, that this only an IB. imho
  • #3,960
  • Apr 26, 2011 11:46pm Apr 26, 2011 11:46pm
you are right, this is no valid 123. Point 2 has to take out the point 1 candle by at least 1 pip.
So your point 2 candle is more like an "inside bar".

Cheers,
Olarion[/quote]

hey O I have a question regarding 123's, there is another rule that states the setup bar has to be within 2.4 pips of point 2, so if we are going long and the setup bar does not make a high within or past point 2 then it's no setup
OR is does the low of the setup bar have to be under or within 2.4 pips of point 2?
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